La Plata County voters overwhelmingly approved Ballot Issue 1A, authorizing the county to direct up to 70% of the revenue from its lodgers tax away from tourism marketing and toward affordable housing and child care.
With 81% of ballots counted, 69% of voters said the county should be authorized to redirect the funding, while only 31% voted to maintain the status quo.
“I am tremendously excited,” said Commissioner Marsha Porter-Norton.
The county’s lodgers tax – known as the tax locals don’t pay because it applies only to hotel rooms, vacation rentals and other short-term overnight accommodations – is capped at 2% per state law.
Inside Durango city limits, visitors pay a 5.25% tax on short-term lodging. Durango voters did not vote on Ballot Issue 1A.
The passage of the ballot question means the county has broad discretion to use an estimated $700,000 in any number of ways related to workforce housing and child care.
Porter-Norton pledged to implement a transparent process for the distribution of the funds, the first of which will arrive no sooner than the first quarter of 2025.
“My priority is to do exactly what we told voters, which is housing and child care – those are the two things we can do,” she said. “And the other thing that we said very clearly is we want to use it to make strategic investments.”
Currently 100% of the county’s lodgers tax revenue, about $1 million this year, and 55% of the city’s revenue, about $2.2 million, are passed through to Visit Durango, the region’s destination management and marketing organization for sustainable tourism marketing.
La Plata County and the city fund about 30% and 65% respectively of Visit Durango’s annual budget, and the reallocation will cut that budget by about 22%.
Visit Durango Board Chair Ken Stone said he was not surprised by the result of the vote given the obvious need for child care and workforce housing. The impact to Visit Durango is not drastic, he said, but will take some deliberation.
“Collections from the city are obviously the lion's share of what we receive,” he said. “And we're going to have to be smart on how that's spent. … The city and the county hopefully will work together going forward to look at the best ways to work with Visit Durango and spend the funds in the best and most effective way to keep lodging numbers up so that we have tax dollars to work with.”
Until recently, sustainable tourism marketing was the only legally sanctioned use of lodgers tax revenue.
However, a 2022 Colorado law recognized a growing need to “address the social, cultural, and environmental issues related to tourism” and empowered counties to expand the use of lodgers tax revenue with voter approval. Rachel Brown, then the executive director of Visit Durango (she has since left the organization) informed the board of directors that the county may propose a reallocation in April 2024.
Eight other counties previously approved lodgers tax reallocation measures; similar questions were on the ballot Tuesday in Grand County and the city of Montrose.
Brown had long-criticized the results of repeated surveys which found that around 85% of voters supported shifting the money away from Visit Durango.
But Tuesday’s results are a testament to the veracity of those results.
“I'm not surprised, but like with anything, you never take it for granted,” Porter-Norton said.
Vocal supporters of the reallocation showed up en masse to multiple Board of County Commissioner meetings this summer, urging the board to seek voter approval.
“We could literally fill 10 Riverhouses,” said Becky Malecki, the executive director of Riverhouse Children’s Center, told the BOCC in August. “We get 15 calls a week of people we have to turn away because we don’t have room.”
Some in the business community, however, urged caution, arguing that a decrease in spending on tourism marketing could lead to shrinking lodgers tax revenue in the future – meaning the 70% share spent on housing and child care would get a lot smaller.
But no vocal campaign emerged against the ballot issue.
Stone said he agreed with the need for child care and affordable housing, but thought a 70% reallocation was imprudent.
“I hope they can spend that very well to improve affordable housing for (the) workforce and for day care,” he said. “You spread that all around, it doesn't go very far.”
rschafir@durangoherald.com
